AI was supposed to kill engineering jobs — new data suggests they’re more resilient than ever

The narrative that artificial intelligence is rapidly replacing software engineers has become a staple of tech industry headlines, especially after May recorded the highest single month of tech layoffs in years, with AI cited as the primary reason by outplacement firm Challenger, Gray & Christmas. But new hiring data from venture firm SignalFire tells a more nuanced story — one that suggests engineering roles may be the most resilient in the current technological shift.

Hiring data challenges the AI replacement narrative

SignalFire’s latest “State of Talent Report,” which tracked the careers of millions of employees across more than 80 million companies, found that engineering was the most resilient job function in 2025. While total hiring across large tech companies dropped 25% compared to 2019 levels, engineering roles saw a much smaller decline of just 11%. In fact, engineers comprised 55% of all new hires in 2025 across the 12 companies SignalFire classifies as “Tech Majors” — Alphabet, Meta, Apple, Amazon, Microsoft, Netflix, NVIDIA, Tesla, Uber, Airbnb, Block, and Stripe. That is a significant jump from 2019, when engineers represented only 46% of new recruits.

The trend was even more pronounced at early-stage startups, which collectively brought on 7% more engineers in 2025 than they did in 2019, according to the report. “The rationale given for lots of layoffs is consistently AI, and specifically they’ll say AI with respect to code; they’ll say one engineer could do the job of however many engineers in the past,” said Asher Bantock, SignalFire’s head of research. “What we’re seeing on the ground is a little inconsistent with that.”

Why engineering demand persists despite AI coding tools

SignalFire’s analysis deliberately focused on hiring data rather than layoff announcements, which are difficult to track because people often delay updating their employment status after job cuts. Bantock argued that if AI were truly substituting for engineering talent, engineering hiring would be the first to fall amid the current tech hiring contraction. Instead, engineering headcount is growing faster than most other job functions in tech.

This finding aligns with comments from NVIDIA CEO Jensen Huang, who outright rejected the theory that AI will replace engineers. “Somebody said that AI is going to destroy all of the software engineering jobs,” Huang said in an interview at the Stanford Graduate School of Business in April. He then argued the opposite is true. Now that all engineers at NVIDIA are using agentic AI, “software engineers are busier than ever,” he said. Huang added that while agents are writing code near instantaneously, they are constantly pushing engineers to generate “the next idea.”

The Jevons paradox of AI and engineering work

For now at least, it seems that armed with AI, engineering has become a classic example of the Jevons paradox — the idea that greater efficiency doesn’t reduce demand for a resource; it increases it, because the work expands to fill the new capacity. As Bantock put it: “They’re suddenly a lot more productive, and there’s endless work for them to do.” This dynamic helps explain why companies continue to hire engineers even as they invest heavily in AI coding assistants and automated development tools.

What economists and AI leaders are saying

The debate over AI’s impact on employment remains unresolved at the highest levels. While Anthropic CEO Dario Amodei warned last year that AI could wipe out half of all entry-level white-collar jobs and push unemployment as high as 20% within five years, the company’s own head of economics, Peter McCrory, told Bitcoin World in March that he had not yet seen any significant AI-driven effects on the workforce. “There’s at least no larger material difference in unemployment rates” between workers who use Claude for the “most central task of their job in automated ways” — like technical writers, data entry clerks, and software engineers — and workers in jobs less exposed to AI that require “physical interaction and dexterity with the real world,” McCrory said at the time.

Conclusion

SignalFire’s data offers a data-driven counterpoint to the widespread assumption that AI is already replacing software engineers at scale. Instead, the evidence suggests that engineering talent remains in high demand, with AI tools augmenting rather than eliminating the need for human developers. For readers tracking the future of work, the key takeaway is that the relationship between AI adoption and employment is far more complex than simple substitution — and that productivity gains may actually drive continued hiring in unexpected ways.

FAQs

Q1: Is AI really replacing software engineers?
Based on SignalFire’s hiring data from 80 million companies, engineering roles are actually more resilient than other job functions. While tech layoffs have increased, hiring for engineers has declined far less than overall hiring, and engineers now make up a larger share of new hires at major tech companies than in 2019.

Q2: What is the Jevons paradox and how does it relate to AI and engineering?
The Jevons paradox describes how greater efficiency in using a resource can lead to increased demand for that resource, not decreased demand. In the context of AI coding tools, engineers become more productive, which allows companies to tackle more ambitious projects, ultimately requiring more engineering talent rather than less.

Q3: What does SignalFire’s data say about startup hiring of engineers?
Early-stage startups collectively brought on 7% more engineers in 2025 than they did in 2019, suggesting that smaller companies are particularly eager to hire engineering talent even as larger firms tighten overall headcount.